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Five-point plan to solve NSW’s housing affordability crisis

The Property Council will today release a five-point plan to assist the NSW Government solve the housing affordability crisis in NSW.

The plan was earlier provided to Glenn Stevens, former Reserve Bank Governor, who has been appointed by Premier Berejiklian to provide expert advice about how to tackle the crisis head on. The plan has also been used to brief members of the NSW parliament.

The plan is based on extensive research and consultation undertaken by the Property Council that looks at the key drivers of house prices and what can be done immediately to make it more affordable to buy a home in NSW.

“This is a report that provides this government with real solutions to the very real problem housing affordability has become; it is based on sound economic evidence from experts in the field. They are solutions that will work,” Property Council NSW Executive Director Jane Fitzgerald said today.

“The five-point plan is a blueprint for action. Property Council members stand ready to build the houses NSW needs, we just need the government to take the policy and budget decisions to meet us half way.”

Ms Fitzgerald said the five points to solve housing affordability crisis are:

“These five points address demand and supply pressures on the housing market to provide a well-rounded, achievable model. For each point of the plan, the Property Council has outlined steps the government can take now to alleviate the housing pressure in this State.”

“Real solutions will require the Premier to be brave and bold."

“This plan is just that and will make significant inroads in addressing the housing affordability challenge immediately and for the longer term.

“We look forward to working Glenn Stevens and the NSW Government further on ensuring that our children, and our children’s children, can afford to buy a home in NSW.”

Key Facts

• The Property Council of Australia’s plan relies on industry data, economic modelling and expertise to identify the key demand and supply side factors that are ramping up house prices.
• The Plan seeks to explain why it is so difficult to bring new stock to market at $500,000 and under, as well as set out a list of recommendations that will make this aspiration much more likely.
• The five-point plan has been provided to Glenn Stevens and the State Government with over 50 actions that can be implemented in the next 12 months.

The housing affordability problem defined:

• Land in Sydney can be twice the price of similar land in the greater Melbourne area, for current developments that are $600 sqm in Melbourne, they can be up to $1200 sqm in Sydney.
• A median priced dwelling in Sydney costs 8.4 times the median annual household income.
• Nationally a 20 per cent deposit equates to 138.9 per cent of annual income. In Sydney, the median deposit is now $157,000 equating to 168 per cent of annual income.
• On average, it will take a couple 5.6 years to save for a 20 per cent deposit for a unit in Sydney, this compares to 4.3 years in Melbourne or only 2.9 years in Adelaide.
• As at February 2017, 14 per cent of Sydney suburbs had a median price of more than $2 million with only eight per cent having a median under $600,000.
• There are over 8,000 affordable houses “caught” in the planning system some of which would be offered for sale for under $500,000.

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Solving the problem in 5 points

1. Turbocharge housing supply through increased land supply and planning reform.
2. Reform State property taxes and reduce fees, charges and red tape.
3. Better cooperation between all levels of government.
4. Bridge the deposit gap and support first home buyers better.
5. Support the rental market and foster innovative, affordable rental product.